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Mayor: Natchez will whittle down its debt

Published 12:00am Sunday, September 9, 2012

NATCHEZ — If each of the 15,792 city residents counted in the 2010 census forked over $1,259, the city could pay off the Natchez Convention Center plus the rest of the city’s $19.8 million debt.

The alternative, Mayor Butch Brown said, is attentiveness and regular debt payments that can — and will, he said — whittle down that debt.

The convention center is the largest chunk of debt the city has at $10.2 million left to pay, City Clerk Donnie Holloway said. The debt is scheduled to be paid off in 2024.

The $12 million bond was issued in 1999 to build and furnish the convention center, as well as renovate the Natchez Community Center and City Auditorium.

The city refinanced a portion of the bond through an interest-rate swap transaction executed in 2006 with Malachi Financial Products in an effort to save a projected $1.5 million over the next 18 years.

The payments for the convention center debt are split between two separate bonds.

The first portion of the payment comes from the original $12 million bond that was issued in 1999 and will retire at the end of the 2013-2014 fiscal year. The city will pay $550,690 on the bond during the next fiscal year and $543,840 in the 2013-2014 fiscal year.

The other portion of the payment comes from the interest-rate swap transaction. Holloway said the city could not refinance all of the convention center bonds in 2006, so a portion of the remained in the original bond and the remainder was refinanced. As a result, there are now two separate payments for the convention center debt.

The payments for the refinanced portion of the bond will be $476,556 in the 2012-2013 fiscal year and $478,137 in the 2013-2014 fiscal year.

The payment for the refinanced bonds will increase to $1,024,337 in the 2014-2015 and average approximately that until the bond retires in 2024. The payments’ increase coincides with the retirement of the original convention center bond, which Holloway said means that even though one bond is retiring, the city will still be averaging a little more than $1 million in debt service toward the convention center.

The city will pay a total of $1,027,246 on the convention center debt in the 2012-2013 fiscal year, which will begin Oct. 1.

Brown said he is concerned that the city still has $10.2 million left to pay on a $12 million bond that was issued 14 years ago.

Holloway said the city has been paying interest on the bond and will not really start paying off the bulk of the principal of the bond until 2014-2015.

Even with proposed raises and increased salaries on the horizon for the city’s upcoming fiscal year, Brown said the city would meet its debt requirements.

Brown said he believes debt service has been an afterthought in previous administrations.

“Hereinafter, we will always budget debt service first and then we will do the balance of the budget,” he said. “In every unit of government, debt service is the first thing you budget, and I don’t know why that hasn’t been done, but it will be done from now on.”

Brown said the new revenue from the Magnolia Bluffs Casino, which is scheduled to open in December, the annual tax income from the casino and lease payments should cover the city’s debt.

The most recent debt added to the city’s total is the $763,000 mini-bond from Britton & Koontz Bank that was issued in August to purchase the former pecan factory site included in its debt.

The urban renewal bonds for the federal courthouse, which the city has been paying on for the last 10 years, were paid off this fiscal year.

The payment of the courthouse bonds totaled with interest $1.5 million, which Holloway said was spread out in $140,000 annual payments over 10 years.

The city’s total debt also includes a $3 million bond for a street overlay project issued in 2009, $575,000 Natchez Water Works revenue bond in 2005 and a $650,000 loan from Britton & Koontz Bank.

Holloway said the loan was taken out to fund half of a $1.3 million street overlay project after the city failed to receive a $650,000 appropriation from the Mississippi Development Authority a few years ago.

The city is approximately $15 million away from its state-set debt limit, Holloway said. The debt limit for cities and counties is an amount equal to 15 percent of the assessed value of properties in the city or county.

Revenue bonded debt, such as the bonds used to fund the convention center building project and the federal courthouse does not count toward the debt limit.

The City of Natchez’s debt has shrunk from approximately $30 million in the last 10 years at a rate of approximately $1 million a year for nearly the past 10 years. The debt is projected to continue decreasing at the same rate for the next eight years, with the city’s debt totaling approximately $11 million in the 2019-2020 fiscal year.

 

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  • Anonymous

    It’s amazing that instead of trying to get out of debt and bring the coffers back with a surplus they will still not forgo any of those pay raises… they are gonna get theirs regardless to if anything else gets done or not. If there was ever a things as raping the system this would have to be it. A smart politician, yeah I know a contradiction in terms huh?,  would have forgone the pay raises in lieu of  getting out of debt then they could start to look at giving SMALL pay raises AFTER all the debt was settled. Then they could have took it department by department and went through and accessed each department’s needs and took care of those over time starting with the ones who were most detrimental to the city/county first.PRIORITIZE them get them all on track and the same page but do this a little at a time to prevent over extending ones self and creating unnecessary stress and running in the red. A little common sense goes a long way.

  • Anonymous

    Butch was quick to blame past administrations for not paying down debt, aka Obama.  The last paragraph of this article explains it all – Debt has been paid down $1MM/yr for the past 10 years and that will continue for the next 8 years.  Looks like Butch is announcing his candidacy for re-election while reflecting his plan not to do anything about debt elimination.  This means the Magnolia Bluffs revenue will simply cover the reduction in Isle of Capri revenues due to the competition.

    The real problem is not only debt service, but the myriad of opportunities dumped into the city budget to “use other people’s money” through grants and then load up the city’s outgo with ongoing maintenance costs of those grants.  A separate article by the ND is in order to enumerate the amount of these costs that were created through grant utilization in the past.

  • Anonymous

    First, let me assume you are a competent worker, working alongside others who do not contribute as much as you do to the success of your employer.  Second, you should assume that you nor your peers have not had a raise in several years.  Now, if your employer is struggling to survive and needs to pay off debt that has accumulated for many years, would you be willing to wait indefinitely for a raise, or seek other employment?

    To offset this, I would suggest that the governments develop employee evaluations and provide raises to those employees who DESERVE it based on their work output and contribution to the success of the “business”.  The opposite of this was the county giving raises to justice court clerks in the recent past when their department had accumulated over $1MM in delinquent fines that had not been collected since they were not doing their jobs.  The proposed scenario would have a beneficial impact on the quality of service that we, the taxpayers, receive when having to use one of these departments.

  • Anonymous

    WHITTLE-DOWN. LOL

  • Anonymous

    HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAFUNNYFUNNYFUNNY

  • Anonymous

    I realize what you are saying about the pay raise but the majority of employers do not base raises on job performance anymore it is an across the board thing. city government included. however it makes no sense to to give raises across the board or individually when there is more debt than money… in short they need to get their priorities in order which seems to be the one thing any government can’t seem to comprehend.

  • http://www.natchezdemocrat.com khakirat

    You got to kidding B. Brown Whilling down the debt  for he must be spending up the debt!! Need to sell the civic center and put on the tax rolls as other city properties!!!

  • Anonymous

    Yep, and giving across the board raises to everyone perpetuates mediocrity.  No motivation to do better.

  • Anonymous

    In training to be an English teacher……..

  • Anonymous

    YOURFIRSTPUPILCANBEDD.

  • http://profile.yahoo.com/LJRB4RA4WS5RCCI6N6CV3TFTPQ joes

    who decides who gets a raise?  how?  personalities come into play.  would HAVE to be an independent board to be fair.

  • Anonymous

    LOL!!!!!!!!!!!!

  • Anonymous

    1. Supervisors of each department prepare annual performance evaluations for each employee under their supervision.  Evaluations address strengths/weaknesses and areas needing improvement.  Supv. recommends the performance level of the employee on a scale of 1 – 5 or similar scoring.  Appraisals are reviewed at a higher level, e.g. BOA/BOS, or County Administrator, approved to meet the bell curve of rating scale, then distributed back to the supvr. to conduct face to face mandatory employee evaluation discussion.  The higher rating authority may request input from attendant contacts e.g. the justice court clerks who report to the BOS may get input from the justice court judges who those clerks serve.

    2.  Bell curve rating scale should represent about 10% in the highest category, 75% in the middle categories, 10% in the lower category, and 5% in an unacceptable category.

    3.  Salary increase budget should be calibrated to spend in the bell curve, e.g. in a 5% budget, the highest category may receive an 8% increase, the middle category may receive in the 5% range, and the lower category 2-3% depending on money available.  The lowest unacceptable category gets -0-.

    This is a pay for performance scenario – the performing workers get the raises they deserve, the middle gets the “cost of living” type to reflect their contribution, the lower group sees room for work improvement to get higher raises in the future, and the lowest unacceptables get the message.  In the end, the taxpayer gets a better service level at these city/county agencies when conducting business.

  • Anonymous

    Re-read, DD is training – he corrected the post of Khaki above that one.

  • Anonymous

     Test

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